'The Newsroom' recap: Meltdown after investigative story goes south

“News Night” staffers believed they had uncovered a scandal of Watergate proportions – the kind that “makes careers and ends presidencies.”

But instead of winning a Peabody Award for journalism excellence, the military exposé backfired with massive repercussions, potentially ending careers and heaping disgrace on the Atlantis Cable News (ACN) channel.

That’s the setup as HBO’s “The Newsroom” kicks off its second season with Episode 11, “First Thing We Do, Let’s Kill All the Lawyers.”

The crippling crisis started when ACN aired an investigative piece about a U.S. military secret mission, Operation Genoa. Now the news channel, in a damning mea culpa, has retracted the story.

What’s more, ACN is hit with an advertiser boycott, parent company president Reese Lansing (Chris Messina) is barred from a congressional hearing and news anchor and managing editor Will McAvoy (Jeff Daniels) faces condemnation by the House of Representatives for calling the tea party “the American Taliban.”

Will projects a nonchalant demeanor but inwardly panics as he’s deposed by First Amendment attorney Rebecca Halliday (Marcia Gay Harden).

“No one who was responsible for Genoa will ever work again,” Rebecca ominously warns Will – at the rate of $1,500 per hour.

The news anchor also tried to play it cool when bowtie-wearing boss Charlie Skinner (Sam Waterston) pulled Will from 9/11 anniversary coverage due to the Tea Party remark and other controversies.

Stepping in as a temporary newsroom replacement was Jerry Dantana (Hamish Linklater), who received a tip about Operation Genoa and doggedly followed through – despite Mackenzie’s initial reluctance.

As for Jim, he desperately wanted out of New York because it became “brutally awkward” working with associate producer Maggie Jordan (Alison Pill) and her on-again, off-again boyfriend Don Keefer (Thomas Sadoski).

Remember last season when Maggie spotted a “Sex in the City” tour bus and loudly vented her frustration at being entangled in a love quadrangle? She was dating Don but in love with Jim, who was going out with her roommate.

The mess spread because a blogger captured Maggie’s tirade on video, posted it on YouTube and Don just saw it and moved out. No wonder Jim fled Manhattan.

But joining the Romney tour is no panacea for Jim, who’s barred from the press bus by an ACN-hating media handler. Fortunately, a competing news reporter – no-nonsense Hallie Shea (Grace Gummer) – intervened on Jim’s behalf and got him through the door.

Is Hallie on tap as Jim’s next love interest? Is she a better choice than Maggie?

Maggie, meanwhile, endured a horrible year – romantically and professionally. She’s lost her girlish optimism. Her blond locks are gone, replaced by spiky red hair. And she looks world-weary after returning from an assignment in Uganda that went tragically wrong.

Elsewhere in the newsroom, sexy nerdy financial analyst Sloan Sabbith (Olivia Munn) pressed Will to investigate predator drone strikes in Pakistan. Civilians are dying as collateral damage. Is this legal or moral?

Will agreed to moderate a panel discussion on drones but surprisingly refrained from posing tough questions to a military hardliner. Lost your mojo, Will?

Many breaking stories are on their way in this nine-episode season, notably the 2012 presidential election, Occupy Wall Street and the terrorist attack in Benghazi.

But overshadowing these events for the ACN team is fallout from the Operation Genoa debacle.

“It was the biggest thing any of us had ever touched,” Mackenzie told her attorney. And “News Night” got burned.